You are here

Frontline's proposal is so disingenuous: Let me count the ways

Frontline's Reed Hundt is mounting a furious eleventh hour effort to finagle a backroom sweetheart deal for his company from the FCC, in the 700 MHz auction. He attacked the outstanding op ed in the Washington Post by Robert Hahn and Hal Singer in both the Post and in RCR.  Our former Big Government FCC Chairman, Mr. Hundt also apparently has lost his cool and perpsective in railing against the rollout of the new, innovative and already successful iPhone as somehow a market failure that only his company can cure.

Let's take apart some of Mr. Hundt's grandest disingenuous claims:

  • In his Post Letter to the Editor, Mr. Hundt, outrageously claims: "Frontline Wireless has proposed that the Federal Communications Commission adopt a market-based way to build, at no cost to the taxpayer, a national wireless broadband network for first responders to use."
    •  Frontline's proposal couldn't be farther from "market-based"!
      • Frontline is asking that FCC short circuit the free market auction, and rig it with special rules so that only their company can meet the special requirements. That's not an auction! That's a spectrum earmark. That's a rigged auction. In an auction, you don't know who wins until the last bid. In Frontline's proposal, if they get their special auction rules, everyone will know who wins the auction before the first bid, because that's the purpose of the special rules.
      • It also is not a free market when you mandate the business model in two fundamental ways.
        • Frontline's proposal would grant it de facto monopoly status for first responders, and then the FCC would be in the untenable position of either leaving first responders at the mercy of monopoly prices terms or conditions, or the FCC would have to price regulate this entity, a form of wireless "UNE-P" that I exposed in a previous post.   
      • Mr Hundt apparently can keep a straight face when he asserts his proposal would be "no cost to the taxpayer." This is why in a court of law, one has to swear to "tell the truth, the whole truth and nothing but the truth." Mr. Hundt is parsing his language much like one of his mentors did in trying to say it "depends what your definition of 'is' is." Mr. Hundt is disingenuously claiming that if he gets a multi-billion dollar spectrum windfall or wealth transfer from the American taxpayer in foregone auction revenues, he won't charge the public! How big of him. Unfortunately, the Congressional Budget Office (CBO) and OMB have "scored" this auction and the estimated revenues are built into the US budget. Maybe Mr. Hundt thinks the US Treasury is a piggy bank to be raided for personal gain, but the CBO and OMB  consider those auction revenues the taxpayers' under the law.

Mr. Hundt is also disingenuous that his plan is the only way to protect the "homeland." Mr. Hundt would conveniently like people to forget that Congress has already allocated for public safety and first responder use 24Mhz of spectrum (12 Mhz for a national wireless broadband network.) Congress also has allocated roughly a billion dollars for interoperability grants, enhanced 911 programs, and a national alert and tsunami warning system. Seems like the "whole truth" is something that escapes Mr. Hundt's disingenuous "homeland security" defense of his Frontline proposal.

Bottomline: If one looks at the Frontline proposal closely it is not anything like Mr. Hundt likes to characterize it. Mr. Hundt and his Google-gaggle of investors are disingenuously claiming homeland security is their only motivation, however, transfering billions of dollars of taxpayer wealth to Frontline's coffers in an the equivalent of an "auction policy heist," and promoting net neutrality/open access are also very big -- and maybe over riding motivations for Frontline's backers.